Question 1

What is a corporate scenario? What are the three steps in their construction?

Accepted Answer

The answer of What is a corporate scenario? What are...

Question 2

Corporate scenarios are pro forma balance sheets and income statements that forecast the effect each alternative strategy and its various programs will likely have on division and corporate return on investment.

Accepted Answer

Corporate scenarios are indeed pro forma balance sheets and income statements that predict the impact of different strategies and programs on the financial performance of the division and the company as a whole.

Question 3

The attractiveness of a strategic alternative is affected by its perceived compatibility with the key stakeholders in a corporation's task environment.

Accepted Answer

The perceived compatibility with key stakeholders in a corporation's task environment is an important factor in determining the attractiveness of a strategic alternative. If the alternative is not perceived as compatible, it may face resistance and lack of support from stakeholders, reducing its attractiveness.

Question 4

"The customer is always right" is an example of a policy in Nordstrom's.

Accepted Answer

Nordstrom's is known for their strong customer service culture, and "The customer is always right" is a core policy they practice.

Question 5

Some executives show a self-serving tendency to attribute the firm's problems not to their own poor decisions, but to environmental events out of their control such as government policies or a poor economic climate.

Accepted Answer

This statement is true as some executives may try to shift blame for business problems onto external factors in order to avoid taking responsibility for their own poor decisions.

Question 6

There is mounting evidence that when an organization is facing a dynamic environment, the best strategic decisions are arrived at through consensus when everyone agrees on one alternative.

Accepted Answer

While consensus can be valuable in certain situations, in a dynamic environment, relying solely on consensus for strategic decisions can be slow and inhibit the ability to respond quickly to changes. Diverse viewpoints and a more agile decision-making process, possibly led by a smaller, empowered team or leader, are often more effective in rapidly changing contexts.

Question 7

The real-options approach used by Chevron for bidding on petroleum reserves improves organizational performance.

Accepted Answer

The real-options approach allows Chevron to make flexible and informed decisions about bidding on petroleum reserves, ultimately improving their ability to successfully acquire and extract valuable resources. This can lead to improved financial performance and overall organizational success.

Question 8

In evaluating a strategic alternative, if there is little fit with the company's culture, what are management's options?

Accepted Answer

The answer of In evaluating a strategic alternative, if there...

Question 9

Risk is composed not only of the probability that the strategy will be effective but also of the amount of assets the corporation must allocate to that strategy and the length of time the assets will be unavailable for other uses.

Accepted Answer

This statement is true. Risk involves more than just the likelihood of success - it also includes opportunity cost and the length of time that resources must be committed to a particular strategy.

Question 10

A strategy's compatibility with the corporate culture has little likelihood of impacting its success.

Accepted Answer

A strategy's compatibility with the corporate culture can have a significant impact on its success. Corporate culture influences employee behavior and decision-making, as well as the overall organizational environment. If a strategy goes against the existing culture, it may face resistance and fail to gain traction, resulting in failure. On the other hand, a strategy that aligns well with the corporate culture is more likely to be embraced and integrated successfully into the organization.

Question 11

Even the most attractive strategic alternative might not be selected if it is contrary to the needs and desires of important top managers.

Accepted Answer

Top managers have significant influence in the decision-making process and if the strategic alternative goes against their needs and desires, it is likely to be rejected.

Question 12

In a dynamic environment, using consensus to arrive at a strategic decision is not recommended. Why? What two techniques can strategic managers use to avoid the consensus trap?

Accepted Answer

The answer of In a dynamic environment, using consensus to...

Quiz 8: Strategy Formulation: Functional Strategy and Strategic Choice